Formula E is on track for a stock market flotation

Leonardo DiCaprio, Sir Richard Branson and Alain Prost own teams, while John Malone and Discovery own shares in motor sport series

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The Independent Online

Formula E, the electric motor sport series which will race in Battersea Park next weekend, is on track to float when it reaches break even, according to its chief executive Alejandro Agag.

The championship launched last year and is the world’s first fully-electric racing series. It features single-seater cars with top speeds of 150mph and races in city centre locations. Next weekend it hosts its season-ender on a 1.8-mile track which winds through Battersea Park.

“When we get to profit the float is definitely an option. It’s a good way to give liquidity to the investors who have come in early. Investors usually want to have a way back to liquidity. This way is the most obvious one and probably the one which can realise most value for the shareholders,” says Mr Agag.

Few expected Formula E to succeed but it has attracted the attention of famous names including former Formula One champion Alain Prost, Sir Richard Branson and Hollywood actor Leonardo DiCaprio, who all own teams in the series. Most of the drivers have a background in F1 and three are relatives of some of the sport’s most famous champions: Piquet, Prost and Senna.

In March, Formula E announced it had received investment in its Hong Kong-based parent company from the duo of broadcaster Discovery Communications and media mogul John Malone’s Liberty Global. The pairing is now Formula E’s largest shareholder, though it does not have a majority stake. The second-largest stake is held by Spanish real estate developer Enrique Banuelos, who provided the capital for Mr Agag to launch the series last year.

There are five other shareholders including Mr Agag, mobile technology firm Qualcomm and Causeway Media Partners, an American fund founded by venture capitalist Bob Higgins along with Wyc Grousbeck and Mark Wan, the co-owners of the Boston Celtics NBA basketball team.

Discovery owns the Eurosport television channel and Virgin Media but Mr Agag says it will not have any impact on the broadcasting of Formula E, which is shown on ITV in the UK. “There is going to be no impact on the broadcasting, because they do not own 100 per cent of the company. In the long term they may buy the whole thing but it is a decision they need to make whenever they want to do it.”

He adds that Discovery and Liberty aren’t just bringing cash to the table. “They are providing a lot of support in terms of management, people, procedures and systems – the whole management capacity that they have. Obviously we were a start-up and now we are becoming a proper company. We need to put in place the procedures, systems and controls that a proper company has and they are helping us with that.”

Mr Agag says Formula E is in pole position to take advantage of the ever increasing greening of technology which is why it makes an attractive investment. “I think the most important thing for us is to break even financially, and we are in a very good direction to get there. Then just wait, because it will take time for everything to be electric, but at some point it will be mainstream and we will be there. So basically the key to success for us is long term survival.”

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